State Constitutional Amendment for a Balanced Budget

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Summary

This policy proposes an amendment to the Constitution of the state concerning state fiscal matters. The amendment requires the state to limit expenses to levels below that of anticipated revenue and save two percent of expected revenue annually. A two-thirds majority vote of both houses is required to allow the state to take on new debt. However, new debt may only be taken on in response to existential threats to the state.
NOTE: It is recommended this policy be introduced after or in conjunction with the Independent Revenue Forecasting Act.

Draft

State Constitutional Amendment for a Balanced Budget

BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF {insert state}:

Section 1. The following amendment to the Constitution of the State of {insert state} is proposed and agreed to by this, the {insert name of state legislature}, and is referred to the next Legislature for reconsideration and agreement.

Section 2. ARTICLE XX, SECTION XX OF THE CONSTITUTION OF THE STATE OF {INSERT STATE} IS AMENDED TO READ AS FOLLOWS:

(a) The Legislature shall not authorize operating budget appropriations which exceed the actual and estimated revenues and surplus available in the same fiscal year.

(b) The enacted budget must appropriate money for the State’s pensions in the amount necessary to fund the Actuarial Recommended Contribution of all such pension funds during the budget period. This requirement may be suspended if at least two-thirds of the members of the House of Representatives and at least two-thirds of the members of the Senate vote to suspend the requirement.

(c) The total amount of expense appropriations enacted by the Legislature for a budget may not exceed ninety-eight (98) percent of the estimated revenue of the State in the budget period. The remaining two (2) percent must be contributed to {insert name of state Rainy Day Fund}. This requirement may be suspended if at least two-thirds of the members of the House of Representatives and at least two-thirds of the members of the Senate vote to suspend the requirement.

(d) If expenses exceed actual revenue received by the State when reconciled at the close of a budget period, the subsequent budget must subtract any shortfall from the projected revenue available for that subsequent budget.

(e) The total operating budget increase over the prior fiscal year shall not exceed the {insert your state’s TABOR requirement}. This requirement may be suspended by {voter approval or 2/3 vote of General Assembly}.

(f) The Legislature shall provide oversight on all governmental activities.

(g) The Governor shall provide for a process that will produce accurate, timely estimates of future state revenues and to enlist in that process economic and taxation experts of known ability.

(h) Prior to the Governor signing budget appropriations, vetoing budget appropriations, line item vetoing budget appropriations, or allowing budget appropriations to become law without his signature, shall certify total revenues for the same fiscal year.

(i) The Governor shall not sign or allow budget appropriations to become law if the total appropriations exceed the certified revenues for the same fiscal year.

(j) The Governor shall pro rata reduce all discretionary budget appropriations, excluding operating expenses for the legislature and judiciary, debt payments and pension payments, the same percentage the budget appropriations exceed the certified revenues prior to the appropriations bills becoming law to ensure appropriations do not exceed revenue.

(k) The State Treasurer shall deny any payments which exceed enacted appropriations.

(l) The State Treasurer shall maintain and update daily, excluding weekends and state holidays, an easy to navigate, searchable, public database citing the legislated status of appropriations, include but not limited to the an explanation for the purpose of each appropriation, beginning balance of each appropriation, deduction of each expenditure and the end balance.

(m) A court that orders a remedy pursuant to any case or controversy arising under this section may not order nay remedies other than a declaratory judgment or such other remedies that are specifically authorized by the Legislature in a law implementing this section.

(n) Any violation of this section constitutes an offense of 3rd degree misdemeanor, shall be prosecuted by the Attorney General and an impeachable offense under Article {XX}.

Adopted by the Task Force on Tax and Fiscal Policy at the Annual Meeting, July 28, 2016.